With 10yr yields at 1.952, we're certainly not out of the woods yet, but we can at least hold out some hope of exiting the woods.  That wasn't such a given after yesterday's push up to 1.99%.  As details emerged regarding today's corporate bond issuance, we began to see a clearer picture of yesterday's weakness.  (Read more about that in the MID-DAY if you like).

The thesis of corporate bond issuance as far as Treasuries and MBS are concerned is that it puts upward pressure on rates.  But if these deals constituted "new information" to us today, why were they moving markets yesterday? 

The reason is that the firms issuing debt are under no obligation to send us a courtesy heads-up that they're selling bonds in order to hedge a big corporate deal  The selling just appears, and we're left to guess as to its motivation.  Incidentally, I did suggest that corporate bond hedging was likely a factor in yesterday morning's rout, but only the insiders who are privy to the hedging strategy had any idea how big the deal would be and that it would be launched today.

AT&T was joined by several other respectably-sized bond offerings.  It pushed this week's issuance toward the top of the heap for 2015.  And again, the more corporate bond issuance, the more upward pressure on Treasury yields.  As those deals "price" (meaning the final pricing for investors is locked in), the Treasuries that were sold earlier in the process can be bought back.  That accounted for both the afternoon gains in Treasuries as well as the outpeformance vs MBS.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
102-05 : +0-02
FNMA 3.5
104-32 : +0-01
FNMA 4.0
106-30 : +0-01
2 YR
0.5320 : -0.0210
10 YR
1.9540 : -0.0280
30 YR
2.6480 : -0.0170
Pricing as of 4/23/15 5:15PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:44AM  :  Bond Markets Treading Water Ahead of Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "tit for tat"
Hugh W. Page  :  "Heard that the other day. Quicken going after the DOJ!"
Andy Pada, Jr.  :  "DOJ going after Quicken Loans"
John Paul Mulchay  :  "http://mndne.ws/1K9BFNY"
Clay Schmeisser  :  "3% conv purchase... does this have an income cap like MCM? getting conflicting answers from people"
Timothy Baron  :  "We got this notice last week, re: 4605: "Please make sure Line 5 of your 4506Ts do NOT say “and/or its Successors and/or Assigns”. The IRS does NOT approve of us having that verbiage on the 4506Ts because that means we may share the info with entities that may not be on the IRS’ approved list and they greatly frown upon that." Apparently we had several rejections because of it."
Matthew Graham  :  "or 'bought and now need financing' re: DirectTV"
Matthew Graham  :  "yeah. I think they're buying someone"
Jason Anker  :  "wow ATT"
Matthew Graham  :  "
A new 'MBS Mid-Day' has been issued:
Huge Corporate Bond Numbers Help Explain Our Predicament"